Philadelphia Voters Approve City-Run Retirement Savings Program: How It Would Work

On May 19, 2026, more than three-quarters (78.4%) of Philadelphia voters backed a ballot question establishing the Philadelphia Retirement Savings Board. The job of this new board is to implement the PhillySaves program, benefiting workers at employers that do not already offer a pension, 401(k), or similar savings plan.

Voter approval clears the way for the nation's first municipal-level automatic IRA program. The city and program advocates estimate that it could help over 200,000 Philadelphia residents who currently lack access to another company-sponsored retirement plan. Once rules, vendors, and systems are in place, PhillySaves is slated to begin operating by July 1, 2027.

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Who's eligible to be covered?

Under the framework approved by voters, PhillySaves will:

• Cover businesses or nonprofits based in Philadelphia that have operated for at least two years and employ at least one worker. For now, sole proprietors and self-employed individuals are excluded, but coverage may be extended to these groups in the future.
• Cover employers who enroll eligible employees into the city program and are willing to take care of payroll deductions on their own. These businesses are not required to contribute any money.
• Cover employees who are employed by Philadelphia-based organizations, want to plan for retirement, but don't have access to a retirement plan through that employer.

Sidesteps ERISA

ERISA stands for the Employee Retirement Income Security Act of 1974, and sets minimum standards and protections for most private-sector, employer-sponsored retirement plans in the U.S. It's also chock-full of rules, regulations, and mandatory administrative costs.

PhillySaves limits employers' responsibilities to enrollment and payroll processing, so it's not treated as an ERISA plan. Otherwise, ERISA status would impose substantial regulatory burdens on both employers and the city, deterring small businesses from participating.

How will PhillySaves work?

PhillySaves is designed to work in the following way:

• Eligible workers will be automatically enrolled and will have a default contribution rate of 3% to 6% of their pay, unless they actively opt out of the program.
• Contributions will be deducted from payroll and deposited into an individual retirement account (IRA) owned by the employee. The employee can choose between a traditional or a Roth IRA.
• Accounts are portable. This means that if a worker changes jobs, the IRA stays with them and can continue receiving contributions through personal deposits or from a new covered employer.
• Employers will need to transmit payroll data and deductions to the program. Still, all accounts and investment management will be handled by program vendors and overseen by the Philadelphia Retirement Savings Board.

Why programs like PhillySaves matter

Approximately half of Americans ages 25 to 64 have no access to an employer-sponsored retirement plan. This trend is especially pronounced among lower-wage workers and those employed by small businesses. PhillySaves aims to close that coverage gap by making saving a default for workers whose employers don't offer plans.

Proponents argue that automatic enrollment -- even with modest contribution rates -- can significantly improve long-term savings for those who might never feel like it's the "right time" to open an IRA on their own.

PhillySaves provides employees with a turnkey way to save for retirement, and businesses can help employees build wealth without taking on the complexity of sponsoring a full 401(k) or pension plan.

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